Today, any forward-thinking business will be aware of the importance of having a structured and solid proactive approach to monitoring environmental, social and governance (ESG) performance.
ESG has grown in importance over the last few years, with consumers, investors and stakeholders placing more and more emphasis on it. Broadly speaking, having a long-term ESG strategy in place can be linked with stronger company performance, sustainable business practices and an increase in overall company value.
According to PwC, having good ESG ratings will make your organisation more attractive to consumers, with a survey finding 76% of consumers would stop buying from companies that treat the environment, employees or the community badly. According to Gartner, your business will also be more appealing to investors; their study found 85% of investors take ESG factors into consideration when making investment decisions.
A strong ESG performance can also lead to higher employee satisfaction, with a report by Marsh & McLennan finding that organisations with the highest employee satisfaction had ESG scores 14% higher than the global average, likely due to their strong environmental performance.
Monitoring your environmental, social and governance performance can also help you reduce the negative impacts you’re having on the planet and identify key cost-saving areas and efficiencies too.
Although the above all sounds appealing, many companies find getting started on their ESG journey very complex and often overwhelming and, therefore, don’t reap the rewards ESG has to offer.
The path to implementing (and benefitting from) an ESG reporting strategy is not always straightforward or easy. There are a number of ESG frameworks and new regulations which often change, which can be incredibly confusing to navigate. What works for one organisation will often be different for another. However, we’re here to help – our expert advisory team can help you get started on your ESG journey. We’ll work with you to consider the below steps, which are an ideal starting point for making sure your organisation is primed for ESG success:
1. Measure
The first part of your ESG journey should focus on taking stock of where you currently are and understanding which ESG issues you should be prioritising and focusing on.
It’s essential you take the time to measure where you currently are and identify which metrics are most important to your particular organisation.
There is no one-size-fits-all solution here – this will be different for every organisation depending on a host of things including sector, size and location; but the starting point for anyone on an ESG journey should always be identifying which issues are the most important to the business because only then can you outline the action plans needed to achieve your goals.
The best way to do this is by carrying out a thorough materiality assessment; a process of identifying, refining and assessing a broad range of ESG issues that matter most to your business and your stakeholders. A well-structured materiality assessment helps determine which ESG issues you need to spend the most time focusing on and enables you to understand how ESG relates to every aspect of your business so you can make informed decisions on your business strategy, risk management and other processes throughout your business operations.
Once you have decided on the key areas to focus on for your ESG strategy, you can then begin to further align your strategy and reporting with present and future societal expectations, business needs and market developments. You can find out more in our article on materiality assessments or contact our advisory team to get started today.
2. Benchmark
Now you know where your business is at when it comes to ESG performance and what metrics you need to focus on, you can start benchmarking.
By setting benchmarks for improvement you can clearly track progress and adjust your business strategy as and when needed. Tracking your progress against pre-defined benchmarks is only possible with accurate and accessible data at your fingertips. That’s where our technology platform, Sustainion, comes in.
With Sustainion, you’ll never need to monitor data through outdated practices, such as Excel spreadsheets, multiple files and owners. Sustainion is specifically designed to track your ESG journey with specific calculations built in for areas like emissions factors. It’s tailored to you and your business and built around your ESG frameworks making it intuitive and easy to use.
You can input data on a regular basis (much like reporting on your financial performance) and view the data through simple charts and diagrams, making it really easy to see how you’re performing and spot areas for improvement. It’s important to remember that your ESG reporting strategy is only as good as the data that it’s being modelled on.
3. Build a long-term strategy
Once you have an ongoing process in place to monitor, report and act on your data, in principle creating your ESG baseline, you can then start looking longer-term. You can use the data to spot short and long-term trends in conjunction with stakeholder input and begin planning a sustainable and profitable future for your business.
Looking further into the future, you can use the data to shape all of your strategies – from improving employee experiences at work to looking at ways you can reduce costs through energy and waste consumption. Sustainion focuses on real-time data, so you can easily monitor if you are on course to achieve your long-term goals and, if you’re not, you can adjust your strategies to get you back on track.
How we can help
At Turnkey, we can help you start your ESG journey using our vast ESG experience to guide you through the process. We can work with you and your key stakeholders to uncover the data your business needs to be focusing on and we can walk you through the best ways to track this data and make sense of it using our intuitive technology platform.